How often do you retreat from a market when the grind is steeper than expected? Entering a new market segment is the hardest thing you will do as a company. It is not for the faint of heart yet unlocking a new market segment is incredibly rewarding. This article will walk you through the elements of a successful new market entry.
Planning: Develop a Market Ecosystem
As you develop your go-to-market plan, build an ecosystem of the market that includes these elements:
- Buyer and Influencer Persona(s)
- Third-party Influencers Respected by the Persona (key associations, industry publications, subject matter experts, analyst firms with credibility in the industry, etc.)
- Competitive presence and touchpoints
- Your company presence and touchpoints
Planning: Map the Tenure of Existing Competitors
It is common for companies to identify the existing competitors and rank them by market share. What is often missed is to also include the tenure of those competitors in the market. During new market entry, you are most likely entering a growing market. Evaluate if the tenured companies are gaining or losing market share. In other words, what is their forward momentum in the market. Are your competitors highly tenured with a high degree of positive momentum gaining market share? If so, then you are in store for a steep climb of 24-36 months. Are the tenured competitors relatively flat with new emerging players gaining on them? In that case you can expect to start to make gains in 12-18 months.
Note that both scenarios have a timeline that exceeds 12-months. Yet most leaders want to give up after six to nine months of limited progress. New market expansion should not be expected to contribute in the same year as the launch.
Planning: Reverse-engineer the Coverage Model of Competitor Sales Resources
Gain an estimate of the go-to-market approach and the number of roles in the field for your top competitors. This can be reverse-engineered by carefully studying job postings and Linked-in profiles of the competitor sales force. Do they have inside and field sales? Do they have customer success managers for existing clients, or do they use an account manager approach? These insights will help you identify gaps in their coverage that you can exploit.
Examine the geographic coverage of the competitor’s sales staff. Where is their coverage is strong, where is it weak? Carefully inspect and deduce their go-to-market plan. Select your entry points by identifying where your competitors have gaps in their field coverage. This way you avoid going head-to-head with your opponent’s strengths.
Planning: Find the Gaps in Competitor Marketing Plans
Another route to market can involve selecting marketing channels where your competitors are not present. Evaluate the market mix of the top 1-2 competitors with the strongest forward momentum in the new market. Determine where they are weak. For example, a tenured competitor who is highly traditional may lack digital marketing capabilities. Google pay per click (PPC), account-based marketing banner ads, and paid social are rarely used in these types of companies. This should be a top area of focus since these digital channels have proven to be effective for those who invest.
Virtual conferences can also be a cost-effective way to launch into a market. Companies report virtual (vs. in-person) is only 10-15% as effective in building pipeline and opportunities. However, the virtual events are typically a fraction of the cost, so cost and impact are all relative. The virtual events that are working for B2B marketers are those that offer a proven platform for engagement. This provides a good opportunity to establish your brand within an industry while being cost effective.
In-person conferences will begin to return as well. A proven method of going after a market leader is to avoid the major tier 1 industry conferences. This is usually where the market leader is dominant. Instead focus marketing dollars on attending the state and regional conferences that the big competitor is neglecting. This approach will also help you stay off their radar as you work to gain ground. It delays your competitor from being enabled to sell against you. By having a presence at the smaller conferences your team doesn’t have to stand in the shadow of a giant.
Planning: Marketing Efficiently While Staying Off the Radar
Account-based Marketing (ABM) ad platforms can be very effective. They allow you to enter the market by targeting a limited advertising spend at the key accounts. This method of advertising also works in a work from home environment. The platforms tap into ad networks that match company employees with their devices, regardless of IP network. Additionally, the beauty of this type of advertising is that only the target clients see the advertising. You can enter a market with a strong advertising blitz. All while competition does not realize you are in the market and are not exposed to your messaging.
Execution: Focus the first 12 Months on Indicators You Control
Ultimately you want to drive lagging indicators which is almost always going to be bookings of recurring revenue. To get there you are going to need to invest for a minimum of twelve months in activities to seed the market. Focus on activities you control 100% that represent the tactics of your marketing and sales plan. These involve the soft metrics of brand impressions, emails sent, calls made, and paid advertisement clicks. It is tough to celebrate these vanity metrics. But stick with it. The tactics will begin driving leading indicators such as buying process engagements and marketing qualified leads by months 9-12. They will show that you are building momentum. Pipeline opportunities will build and reach critical mass by months 12-18 and begin closing to wins.
These are the survival expectations necessary to grind through the early stage of new market entry. Follow the steps within this framework to maximize your success and build a winning plan.